How quickly can a DST close if I'm running out of time on my 1031?

The building was bought, financed and leased before you arrived, so there is nothing left to underwrite

This is the structural reason for the speed, and it comes straight out of Rev. Rul. 2004-86. In the ruling's facts the loan and the net lease are signed on the same day the property is bought and before any beneficial interest changes hands, so that "the financing and leasing arrangements related to Blackacre that were made prior to the inception of DST are fixed for the entire life of DST."

A trust that could still negotiate its debt or its lease would fail the classification test, so every offering you are shown is already fully assembled. There is no appraisal to order, no loan committee, no estoppel chase and no title work in your name.

Sponsors put the practical number at 3-5 days once a subscription is complete. Treat that as the funding leg only, not as the whole errand.

Day 45 does not move for an emergency, and day 180 can arrive earlier than you think

Section 1031(a)(3) gives no relief for a collapsed deal. Property is disqualified if it is not identified within 45 days of the transfer of the relinquished property, and the exchange fails as to anything received after the earlier of 180 days or the due date of your return for that year.

So the honest question is not how fast a DST closes but whether the trust is on your list. If you are past day 45 and did not name it, speed is irrelevant. Can I change my identification list after day 45 and can I get an extension deal with the narrow exceptions.

If you are before day 45, the calculation is different: you have time to name trusts you may never use, and that option costs nothing.

Name the trust, the offering and your dollar amount — a street address will not do it

Treas. Reg. §1.1031(k)-1(c)(3) requires replacement property to be "unambiguously described," which for real property means "a legal description, street address, or distinguishable name (e.g., the Mayfair Apartment Building)." A beneficial interest is described by the trust's own name, not by the address of a building the trust happens to own.

The working convention is the full legal name of the Delaware statutory trust as it appears on the offering, plus the interest you intend to acquire stated as a dollar amount or a percentage. Naming an amount matters because a partial interest is what you are actually acquiring.

Paragraph (c)(4)(i) lets you name three properties "without regard to the fair market values," so three separate trusts can sit on the list beside nothing else, or two trusts can sit behind the deal you actually want. How many properties you may identify sets out the alternative 200-percent route.

Proving you are accredited is the step that eats the days, and which rule the offering uses decides how bad it is

Under Rule 506(c) the issuer "shall take reasonable steps to verify that purchasers of securities sold in any offering under paragraph (c) of this section are accredited investors." A written representation from you is not enough; the rule contemplates tax forms, net-worth documentation or a confirmation letter from a registered broker-dealer, investment adviser, attorney or certified public accountant.

A Rule 506(b) offering permits a reasonable belief based on your own questionnaire but forbids general solicitation, so it cannot be advertised to you. An offering you found through a public website is therefore likely to be a 506(c) deal with a verification letter in its critical path.

Getting a CPA or attorney to issue that letter in the week your deal collapses is the single most common cause of a slow DST closing. A prior verification can be relied on for up to five years under the same rule, so if you have one already, produce it on the first call. Accredited investor requirements for DST investments has the thresholds.

Offerings fill, and an allocation is not a reservation

Equity in a given trust is finite and is taken up as subscriptions are accepted. A trust that had room when you identified it on day 45 may be closed to new money by day 90, which is why naming a single trust as your only backup is a thin plan.

Form D is filed "no later than 15 calendar days after the first sale of securities in the offering" under 17 CFR §230.503(a), so a public filing tells you an offering has begun selling, not how much is left. Remaining availability is a question for the sponsor on the day, every day.

Ask for the allocation in writing, ask how long it is held, and keep a second and third trust identified behind it. Using DSTs as backup properties covers building the list before you need it.

A day-38 hypothetical, and the documents ordered by how long each one takes

Hypothetical with round numbers. Your buyer's lender kills the primary purchase on day 38 with $900,000 sitting at the intermediary. Days 39 to 44 go to offering review and paperwork, day 45 you identify three trusts by name and dollar amount, the subscription is accepted in the following week and the intermediary wires; the exchange completes well inside day 180.

That timeline only works because the slow items were started on day 39 rather than day 44. The list below is ordered by lead time, longest first.

None of this is advice on your own facts, and the tax consequences of the substitution should be confirmed with your CPA or attorney before you sign the subscription.

• Accreditation evidence: a third-party verification letter or the underlying documentation. Start this first; it depends on someone else's calendar.
• Entity and trust paperwork: operating agreements, trust certifications, resolutions and the signatures of every co-owner, including any who are travelling.
• The intermediary's file: your exchange agreement, the assignment and the written notice to all parties, which must be in place before funding.
• Offering documents: the private placement memorandum and the subscription agreement, which you should read rather than skim; see how to read a DST PPM.
• Wire instructions: verified by a callback to a number you already held, never to a number supplied in the email carrying the instructions.